"Choice Blindness" Can Transform Conservatives Into Liberals - and Vice Versa

Well, balancing the budget is just, to put it bluntly, a really bad idea. There's a reason companies will frequently borrow to expand themselves. It is often the case that to do so produces better returns than the interest/dividends rates one has to pay on those loans/dividends/whatever. By the same token, government action into funding research (which leads to people/companies expanding the economy) and social programs (which provide a base framework of funding to keep the economic engine running even in bad times) can well pay for themselves. How do I know this to be true? Because rather consistently while the US debt has grown, the GDP has grown at a faster rate.

Actually that isn't the case at all. The budget deficit is increasing faster than the GDP is growing.

http://upload.wikimedia.org/wikipedia/en/f/fc/U.S._Total_Deficits_vs._National_Debt_Increases_2001-2010.png [wikimedia.org]

This means that the debt keeps getting bigger and bigger, even adjusting for inflation. When a company becomes heavily in debt, shows only the possibility of increasing debt, and its assets can't be liquidated to make up for that debt, the debtors begin to lose trust that this company will ever repay its assets and will stop lending.

The US government is doing exactly that. Sooner or later one of two things is going to happen. Either they print so much money that the dollar gets to a point where no foreign governments will accept it for trade (it has already done that in many places) that it eventually becomes worthless to the US citizens as well, so there would be no point in buying government bonds because you wouldn't gain anything by doing so, which results in the government having no more money to borrow, and government employees (soldiers, teachers, contractors, etc) no longer get paid, so the government basically just shuts down. Or, if they stop printing money, they'll default on their loans, and nobody buys bonds anyways.

Greece is what happens when governments go bankrupt. Now imagine that on a much larger scale.

Taxing the shit out of the wealthy won't solve the problem either, for a multitude of reasons. Poor people don't hire other people. Making the rich poor is a bad idea for that reason. Also, if you even hint at doing so, they can and WILL leave. Look at France. A few years back they made tax increases designed to bring in an extra $120 billion in revenue, and the result was a net reduction of $50 billion in revenue below what they already had. Why? Because people just left, many of them bringing their businesses along with them, even people who lived in France over generations proudly spanning from time immemorial. Trying to fix that problem by preventing people from leaving is just asking for a civil war. Ceasing assets will result in what is happening in Cyprus right now.

Go look at all of the nasty things that Johnny Depp had to say about America prior to permanently moving to France back in 2003 or so, how evil America is, and how France was this beautiful paradise. After realizing that they were basically taxing away basically everything he had, he RAN back to America as fast as he could.

Taxing your way out of a budget deficit is like trying to dig your way out of a hole.

Source: http://rss.slashdot.org/~r/Slashdot/slashdotScience/~3/ihVyiAT7FZ8/story01.htm

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